Reichlin Hess Attorneys at Law, Tax Advisors, Notaries, Zug, Switzerland

Swiss VAT: Declaration requirements for foreign enterprises generating turnover in Switzerland

The Swiss Federal Tax Authority (SFTA) has issued the final version of the VAT-Information brochure no. 22 regarding foreign enterprises. This publication describes the practice of the SFTA in connection with enterprises that are resident outside of Switzerland but provide goods or services in Switzerland.

Since the beginning of 2018, foreign enterprises with a worldwide turnover of CHF 100,000 or more have to pay VAT on their goods and services provided in Switzerland (unless exempt from VAT). Such enterprises are required to apply for the registration in the Swiss VAT-register. The applicable Swiss VAT should be included in their invoices for goods and services provided in Switzerland, and the respective VAT should be paid to the SFTA. Furthermore, such enterprises need to appoint a tax representative in Switzerland and usually have to deposit a security with the SFTA.

To improve compliance processes, foreign enterprises may declare only the Swiss turnover in the VAT declarations and not the worldwide turnover. However, if foreign enterprises may file a claiming for repayment of input VAT, the SFTA may also ask for further information regarding turnover generated outside of Switzerland.

A foreign enterprise is not subject to VAT in Switzerland if it only renders certain services that are deemed to be performed at the place of residence of the recipient (e.g., advisory services by a foreign attorney to a client resident in Switzerland). In such cases, the reverse charge procedure may be applicable.

Our tax advisors would be happy to support with any further questions you may have regarding this topic.